UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 40489 / September 28, 1998
ADMINISTRATIVE PROCEEDING
File No. 3-9736
______________________________
: ORDER INSTITUTING PUBLIC
In the Matter of : ADMINISTRATIVE PROCEEDINGS
: PURSUANT TO SECTIONS 15(b)
Patricia S. Gale, : AND 19(h) OF THE SECURITIES
: EXCHANGE ACT OF 1934,
: MAKING FINDINGS AND
Respondent. : IMPOSING REMEDIAL SANCTIONS
______________________________:
I.
The Securities and Exchange Commission (Commission)
deems it appropriate and in the public interest to institute
administrative proceedings against Patricia S. Gale (Gale)
pursuant to Sections 15(b) and 19(h) of the Securities
Exchange Act of 1934 (Exchange Act). In anticipation of the
institution of these administrative proceedings, Gale has
submitted an Offer of Settlement (Offer) which the
Commission has determined to accept. Solely for the purpose
of these proceedings and any other proceedings brought by or
on behalf of the Commission or in which the Commission is a
party, and without admitting or denying the findings
contained herein, except those matters contained in
subparagraphs III.(A) and (B) below, which are admitted,
Gale, by her Offer, consents to the entry of this Order
Instituting Proceedings, Making Findings and Imposing
Remedial Sanctions.
II.
ACCORDINGLY, IT IS ORDERED that proceedings pursuant
to Sections 15(b) and 19(h) of the Exchange Act be, and
hereby are, instituted.
III.
On the basis of this Order and Gale's Offer, the
Commission makes the following findings:
A. During the period from in or about November
1989 to October 1990, Gale was a registered representative
associated with a registered broker-dealer.
B. On October 3, 1997, in the case of SEC v.
Gary W. Berus, et al. (Civil Action File No. 96-74524),
Judge Nancy G. Edmunds of the United States District Court
for the Eastern District of Michigan, Southern Division,
entered an Order of Permanent Injunction and Other Equitable
Relief against Gale, pursuant to her consent and without
admitting or denying the allegations contained in the
Commission's Complaint, enjoining Gale from violating
Section 17(a) of the Securities Act of 1933, Sections 10(b),
15(a)(1) and 15(c)(1) of the Exchange Act and Rules 10b-5
and 15c1-2 promulgated thereunder.
C. The Commission's Complaint alleged that from
approximately January 1990 to in or about April 1994, Gale,
among others, participated in a scheme whereby approximately
120 investors were defrauded in connection with the offer,
purchase and sale of over $3 million in fictitious
certificates of deposit issued by a purported international
bank, Century Security Bank & Trust, Ltd., and interests in
two investment clubs, Profit Masters Group and Meca
International, Inc. In connection therewith, Gale, directly
and indirectly, made misrepresentations and omissions of
material fact concerning the legitimacy of the investments,
the returns to be expected, the commissions generated and
the risks involved. The Commission's Complaint further
alleged that by regularly offering and selling such
securities for the account of others while also receiving
commissions from such sales, Gale was acting as a securities
broker and should have been registered as a broker-dealer
with the Commission.
IV.
In view of the foregoing, it is in the public interest
to impose the sanctions specified in the Offer.
ACCORDINGLY, IT IS ORDERED THAT:
Patricia S. Gale be, and hereby is, barred from
association with any broker, dealer, municipal securities
dealer, investment company or investment adviser.
By the Commission.
Jonathan G. Katz
Secretary